Osman Şenkul
The earliest interest rates in history were expressed not in numerical units but in ‘unit fractions’. These were based on fractions of 1/60 in Mesopotamia, 1/10 in ancient Greece, and 1/12 in Rome.
According to economic historians, the Sphinx Secret formed the basis for explaining the origin of interest-bearing loans and why interest rates varied from society to society. In the three fundamental civilisations—Bronze Age Sumer, classical Greece, and Rome—interest rates began to be set when trade commenced and remained stable for as long as these civilisations endured. In these three civilisations, interest rates were set lower than the previous ones; 20 per cent in Mesopotamia, 10 per cent in Greece, and 8 1⁄3 per cent in Rome.
When economic historians examine the examples from Sumer, Greece, and Rome, they see that interest was referred to as ‘child’ or ‘calf,’ reflecting the growth of the herd. In contrast, it was questioned why the perception of interest based on ‘the growth of the herd’ lost its influence after Sumer, in Greek civilisation and later in Rome. Based on this, the economic historian Böhm-Bawerk (Capital and Interest – Eugen von Böhm-Bawerk), who conducted research on this topic about 100 years ago, fundamentally rejected these ‘naive productivity’ attributions to interest. According to Böhm-Bawerk, when we consider the repayment capacity of many farmers, it is impossible to think of interest as being ‘economically’ based. Accordingly, the conditions that forced a farmer to borrow were considered very ‘humiliating’ from their perspective. One of the important financial dynamics of ancient civilisations was the accumulation of debt balances, including interest, which exceeded the repayment capacity of many debtors. For this reason, the rulers of Mesopotamia (royal amargi, andurarum and misharum) repeatedly cancelled all agricultural debts (loans) between 2400 and 1700 BC in order to make a ‘clean sweep’.
Piotr Steinkeller, who conducts research on the trade and general economy of the period (Trade Routes and Commercial Networks in the Persian Gulf during the Third Millennium BC), points out that very few trade contracts from before Ur III have been found. Johannes Renger, who has conducted numerous studies on the social and economic relations of Mesopotamian civilisations (The Role and the Place of Money and Credit in the Economy of Ancient Mesopotamia) supports Steinkeller’s argument by noting that ‘despite numerous important articles and monographic studies focusing on specific periods and topics related to credit issues, there is no comprehensive research on the large number of debt documents in the royal archives, which cover almost the entire society.’
Renger also questions why the interest rate was set at 20 per cent for debts based on silver during this period, but at 33 1⁄3 per cent for debts based on barley, pointing out that the answer to this question would be ‘difficult to find under today’s conditions’; However, although this somewhat contradicts his belief, he points out that, based on the fact that early societies were agricultural, interest practices also began in agriculture.
Recalling that interest on agricultural loans was not a fixed rate in Mesopotamian civilisations, Renger emphasises that, in contrast, commercial loans calculated on the basis of silver had a fixed interest rate of 1/60 per month, or 12/60 per annum, equivalent to 20 per cent. Renger emphasises that, despite the uncertainty of commercial profitability, interest was clear-cut in trade, unlike in agriculture where there was no fixed interest rate, and points out that even today, no clear explanation has been put forward for this difference.
In the early days of ancient Sumer, barley was the primary medium of exchange for many goods and commodities. Mesopotamia, the cradle of many known ‘firsts’ on Earth, was also quite agriculturally rich, and therefore, in this region, grains were used for many years as a medium of exchange and as the basic standard for payment and repayment transactions. In fact, even before 3000 BC, some metal ingots were also used as a medium of exchange in this vast civilisation.
When Sulgipanil, one of King Hammurabi’s (1810-1750 BC) commanders, learned that hundreds of people had gathered at the foot of the high Ziggurat, he joined them in this area near the river and spent hours trying to understand their problem. The people gathered there had come together to explain their grievances, just as they always did when they encountered any problems, in order to convey them directly to King Hammurabi.
After leaving the crowd, Commander Sulgipanil went straight to the King without wasting any time; he told the guards at the gate that he needed to see Hammurabi urgently. Sulgipanil bowed slightly as he passed through the leather curtains into the large, dimly lit hall. He saw Hammurabi sitting on a small, bench-like chair directly opposite the curtained door. He bowed his head slightly in respect. Hammurabi, stroking his long, curly beard that reached down to his chest, motioned for him to approach with his other hand. As the commander advanced slowly towards the King, he stopped upon hearing the words, ‘Speak, Sulgipanil… What is the reason for your haste?’
The commander began to speak:
“Our Just King… You must have heard the visitors gathered before the ziggurat. Dozens of people have come from Larsa, Ur, some from Uruk, even from Nippur, seeking your help. Gangs in their regions, disregarding your noble laws, have set their sights on these people and their families’ property, land, fields, the wheat in their barns, their barley, the beer in their cellars, the silver in their rooms, their slaves, and even their wives and children, trying to forcibly take them from these people…”
Before Sulgipanil could finish his words, the King interrupted: ‘Yes, I have heard that many people have come here, that they have problems; I was waiting for you to inform me. Apparently, you don’t know much either. Best I go and speak to these people directly; let’s see what their troubles are and who their enemies are…’
The King headed for the stepped platform at the foot of the Tower of Babel, rising on the eastern side of the open field where the blacksmiths’ workshops were located. The crowd that greeted him also turned south, then east, towards this platform. King Hammurabi, accompanied by Commander Sulgipanil, ascended the platform and greeted his guests by extending both hands slightly forward and waving them. The crowd greeted the King with words expressing love, loyalty, respect, joy, and trust.
Hammurabi spoke directly:
“Awelum (free people) who have come here to Babylon from Eridu, Ur, Uruk, Lagash, Umma, Shuruppak, Nippur, Kish, and other parts of our Kingdom! May the god Shamash bless you all and keep your path open, as it was when you came here, and as it will be from now on… I have heard that there are those who have caused you problems, who have brought you here. Know that we have not tolerated liars, swindlers, or marauders who seize the oxen, sheep, and donkeys of the people in these lands, nor will we tolerate them from now on. We have not sacrificed the orphan to the rich, nor the one with a shekel of silver to the one with a talent of silver, nor will we do so from now on. I have come before you to listen to each of your problems that brought you here to Babylon, tearing you away from your lands. Now, approach one by one and tell your story…!”
The soldiers lined them all up, taking one spokesperson from those who came alone or in groups. The king’s advisors also came up onto the platform and took their places beside him. Everyone spoke in turn; Hammurabi listened and occasionally turned to his advisers, saying something to them. The king silenced those who spoke at length with a gesture of his hand, warning them, ‘You already said that a moment ago; if you have nothing else to say, return to your place.’
After the last person had explained their problems, Hammurabi began to speak:
“By the command of Shamash, the great ruler of earth and sky, let justice shine in the land. From what I understand from each of your accounts, you have incurred debts for various reasons, such as acquiring land, purchasing animals, building houses, and planting wheat, barley, and corn. When the harvest time came and your creditors sought to collect their debts, you encountered problems. These creditors demanded excessive interest (maš) on top of the principal; they showed you that this was stipulated in the contract tablets. From now on, in my lands, no one shall collect a single shekel more in interest than the silver loan they gave to aweluma. From now on, in my lands, no one shall receive even one extra grain of wheat or barley as interest on a wheat or barley loan given to aweluma. From now on, the tablet (contract) of a loan given with more than the permitted interest shall be broken. If a person has borrowed money, but a storm has flattened the crops, or the harvest has failed, or the crops have not grown due to drought, he shall not be required to give grain to his creditor that year. He shall pay no rent for that year. The field, garden or house of a redûm, bâ’irum or nâsi biltim (tax payer) shall not be given (sold) in exchange for silver (money). If an awilum (free man, lord) purchases the field, garden or house of a redûm, a bâ’irum or a nâsi biltim (tax payer), the tablet (contract) will be broken and he will lose (the money he paid) due to interest. The field, garden, and house will return to their owner. Those who acquired ownership by purchasing the land for silver will also fulfil the duties of cultivating or operating the land as specified in other articles…”
Approximately 38 centuries ago, the Babylonian King Hammurabi, famous for the laws he enacted and enforced, also introduced a notable legal solution that prevented the destruction caused by interest, which was considered novel at the time, and paved the way for those harmed by this destruction.
The debts of Mesopotamian farmers, whom Hammurabi saved from ruin centuries ago, and their current northern neighbours, the farmers of Anatolia and Thrace, have increased sevenfold in the last five years, reaching 111 billion 216 million lira in 2020 and 822 billion 366 million lira in 2025. Between 2024 and 2025 alone, farmers’ credit debt increased by 214 billion lira. Crushed under the weight of interest-laden debts, thousands of farmers are unable to cultivate their thousands of acres of land due to foreclosure, while hundreds of tractors rust away in impound lots. Milk cows in barns are seized and sent to slaughterhouses, while enforcement offices are turning into agricultural machinery markets. These developments are sinking agricultural production and opening the floodgates to dependence on imports.
However, the even heavier price of this is reflected in the labels at the market and in the shops; food inflation is soaring. According to the Turkish Statistical Institute (TurkStat), consumer inflation jumped by a significant 4.84 per cent in the first month of the year, with the largest increases based on a monthly price increase of 7.82 per cent in food and non-alcoholic beverages; consequently, annual inflation stands at 30.65 per cent and, despite all efforts, cannot be brought below the ‘30 per cent threshold’. Treasury and Finance Minister Mehmet Şimşek’s assessment of the January inflation figures was even more noteworthy: Şimşek pointed to ‘the impact of weather conditions on food prices’ as the reason for the increase in food prices during this season, when agricultural production is already very low, except for greenhouses in the southern provinces:
‘In the January inflation outcome, food prices, which rose significantly above the long-term average due to adverse weather conditions, and seasonal factors were decisive.’
However, the withdrawal of farmers, many of whom were struggling under heavy debt burdens exacerbated by high interest rates and had lost their fields and tractors, from production suppressed the supply of agricultural products. Consequently, the price increases caused by ‘high demand + low supply’ also drove high inflation.
The Central Bank of the Republic of Turkey (CBRT), however, remains unable to break its dependence on high interest rates, which are hampering production in many sectors of industry. At its meeting on 22 January, the TCMB Monetary Policy Board reduced the overnight lending rate from 41 per cent to 40 per cent. In other words, it maintained the rate at a level approximately 10 points above the annual inflation rate of 30.65 per cent. Consequently, thousands of small and medium-sized food producers, especially farmers who have lost their land and tractors, as well as tens of thousands of businesses operating in dozens of sectors, are struggling to produce under the brake of high interest rates. This creates high barriers to new investments that would create new capacities and open new employment opportunities. and for those who can overcome the barriers, interest rates are draining their coffers into non-production areas.
Although their burdens are not as heavy as they are today, just as hundreds of farmers from all over Mesopotamia flocked to Hammurabi’s gate in Babylon 38 centuries ago and were saved by a widespread interest amnesty, Today, too, in order to be freed from the usurers, people from Anatolia and Thrace must gather together and, with the power to destroy interest, press against Hammurabi’s gates, return to their fields and tractors, and begin production. This will also feed the millions who are forced to pass by food stalls with empty bags, bringing smiles to their faces.